Action group predicts 100,000 mis-selling complaints

Property 118 claimed that because the Financial Ombudsman had previously ruled in favour of mortgage lenders unilaterally amending their mortgage contracts, professional advisers could be accused of not properly explaining mortgage contracts to consumers.

In a blog by Property 118, it alleged: “[The] group has reviewed hundreds of key facts illustrations and advice letters and there was nothing in any of them which made it clear to borrowers that mortgage interest rates could be varied in the way they have.

“In our opinion it is only a matter of time before test cases are submitted by professional advisers operating in this area of law.

“Once an ombudsman rules in favour of a borrower, the flood gates will open.”

Property 118’s claims follow a Court of Appeal ruling earlier this month, which ordered West Bromwich Mortgage Company to reimburse landlords £27.5m after altering interest rates on loans.

Mark Alexander, Founder of Property 118 told B&C: “It’s a prediction…It’s a warning to the industry that this is on its way [and] this is what could happen.”

Property 118 claimed that the Ombudsmen can award up to £15,000 in compensation for each complaint, where it estimates that multiple claims could be worth billions of pounds.

The group predicts that solicitor firms, financial services networks and professional indemnity insurers could be the hardest hit.

Property 118 also advised that indemnity insurers could mitigate these risks by funding a judicial challenge of the ombudsman’s original mortgage contract rulings.

However, Robert Sinclair, Chief Executive of the Association of Mortgage Intermediaries, questioned the validity of Mark’s claims.

Robert said: “…It could only happen where there has been a change, and the case is clearly against the lender.

“Why would the ombudsman be getting involved with [intermediaries] in this situation?

“They’ve got a clear line of sight to the lender.”

The Financial Ombudsman Service declined to comment.